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Business process management as continuous improvement in business

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DOI: 10.3846/bm.2010.010

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 6th International Scientific Conference ISSN 2029-4441 print / ISSN 2029-428X CD
May 13–14, 2010, Vilnius, Lithuania doi:10.3846/bm.2010.010
BUSINESS AND MANAGEMENT 2010 http://www.vgtu.lt/en/editions/proceedings
Selected papers. Vilnius, 2010 © Vilnius Gediminas Technical University, 2010

BUSINESS PROCESS MANAGEMENT AS CONTINUOUS

IMPROVEMENT IN BUSINESS PROCESS
Rute Gonçalves
Oporto Economics University, Rua Dr. Roberto Frias, 4200-464 Porto, Portugal
E-mail: rdaniela@fep.up.pt

Abstract. There are three main components in each business–processes, people and technology. In actual
management context, there is a strong tendency to a regulatory pressure. Managers are being confronted
with several challenges that oblige the adoption of a new way to solve financial and other problems in
business world. Firms should not fear the change, they must be able to plan and execute. Business Process
Management (BPM) is one possible solution: obviously this implies that firms have all processes mapped,
know their interactions between different departments and are well informed about all processes costs. So,
the firms must go on adopting modelling process design and managing enactment to know how people act
in the organization.
Keywords: mapping, rules, process, people, enactment.

1. Introduction This is one of the main drivers to the design

process and for a better definition of information
Far from being a simple application for a fast de-
technology systems and management business
velopment, Business Process Management (BPM)
structures. Technology alone does not translate
involves all players in business process: systems,
business needs into sustainable business advan-
people, information and equipments.
tages.
This function consists in a platform to share an
Organizations must plan the architecture of
end-to-end business process. As had been suggested
business, processes and management. Their con-
(Smith, Finger 2003) BPM assures business, control
cern must be focused on adopting operational effi-
and accounting agility and stability, reduces redun-
cient goals without sacrificing quality in products
dancies and improves automatic responses.
and/or services offered to their clients. Further-
Nowadays, facing actual economic scenario,
more, by the fact that this period of economic de-
BPM has been emerging in importance.
sacceleration is not a short term event, managers
This article aims to show that BPM is a support
should adopt strategies with long term projection.
tool to management, looking forward to continuous
There are several actions to put in action, such as:
improvement.
– To reduce activities those do not create
First the actual management context will be de-
value added to the firm;
scribed. Then BPM will be introduced, by explain-
– To hire specialized staff that becomes avail-
ing the dimensions, language, technology, mapping,
able in the market at a price that is accessi-
drivers and the possible connexion with Business
ble to the firm;
Process Outsourcing (BPO). After that, justification
– To optimize transactions and business proc-
will be presented on how BPM assumes continuous
esses.
improvement, by underlining some key factors –
In front of this challenge, BPM is one promis-
top management, people, process – and several
ing answer.
alerts to succeed in this area. Finally, some addi-
tional reflexions and considerations are made.
3. BPM Approach
2. Actual Management Context There are multiple definitions of BPM. In general:
Today’s financial world demands strong leader- – It is a set of methods, tools and technolo-
ships, capable to define a strategy of innovation, gies used to design, analyze and control opera-
without fear to confront with the procedures and tional business processes;
internal operational standards. Often, in these cir- – It is an approach to improve performance
cumstances, firms are able to accept and easily that combines information technologies with proc-
learn new and different processes. ess methodologies;

67
 R. Gonçalves
– It covers high–level business aspects, such
as, business goals, strategies and value chains
(Weske 2007). Also it concentrates on process
modelling techniques and process enactment plat-
forms, taking into account the different stake-
holders involved.
– It is “a structured approach to understand,
analyze, support, and continuously improve fun-
damental process such as manufacturing, market-
ing, communications and other major elements of
a company’s operations” (Al-Mudimigh 2007).
Autonomously of the several existing mean-
ings, there is a main principle in this subject: BPM
has two sides (the Model and the Human) – none
can be forgotten.
3.1. Dimensions
BPM contains several dimensions. As had been
proposed (Melão, Pidd 2000) there are four per-
spectives on the definition of business processes,
as following:
– Deterministic machines
A process consists in a sum of well–defined ac-
tivities or tasks developed by employers who
convert inputs into outputs to achieve unambi-
guous objectives;
– Complex dynamic systems
A system adapts to a changing atmosphere in or-
der to carry on, emphasizing interaction and dy-
namic behaviour;
– Interacting feedback loops
This organic viewpoint highlights the informa-
tion feedback concerning the structure of the
business processes;
– Social constructs
This perspective results from a personal and sub-
jective construction, concerning the values and
beliefs of people.
To understand a business process (Smith
2003) implies distinguish three areas:
– State
The description of the gathered information that
is generated along the way;
– Capability
The definition attending which are the activities
able to execute and the interaction recognized
between them;
– Design
The explanation of premeditated features of the
process, which occurs during the design stage, in
the moment before the process is able to imple-
ment, to develop and to change. Then, the firm
should explain the gap between intentional de-
sign and effective behaviour.
68
As described above, a business process can be
defined by the understanding that is generated by
each person and groups as a result of different
ways of interpretation.
Independently of the dimension, BPM is a
business strategy that supports and demands a
common language and semantic validation.
3.2. Language
“The communities involved need to share a com-
mon understanding of the principles underlying
business process management” (Weske 2007).
BPM should be supported by the following
headlines:
– Business rules
They must be defined by type of the facts;
– Verb concepts
They must associate concepts to delineate the
timing of the facts;
– Noun concepts
They must define concepts.
Processes and rules are two sides of the
same coin. By defining business rules, signifi-
cance levels must be established. The rule can
be a limit or just a mechanism to assure more
freedom, because it indicates to where it is
possible to go.
There are some indications that must be at-
tended in rules definition, such as: the rule is a
way of information; the rule is expressed as busi-
ness language; the rule must clarify permissions
and obligations (if the rule changes, process will
also change); the rule must be separated from the
business, which means that the process should not
contain many details. Indeed, business rules
should be defined and described away from map-
ping and process description.
Four types of rules can be settled (Wang,
Wang 2006): to cover process routing, operational
constraint, exception handling and business strat-
egy. They form the knowledge base of the cogni-
tive approach to process management.
− Process routing. They are used for scheduling
tasks or activities as well for the further tracking
of their status;
− Operational constraint. They may be applied
to control tasks, to forbid unallowed operations
and they can be specified on the basis of busi-
ness requirements;
− Exception handling. They can be used to cal-
culate the real-time status of tasks or resources
and take positive actions when necessary;
− Business strategy. They can be applied to re-
duce business risk, control workflow, improve
 BUSINESS PROCESS MANAGEMENT AS CONTINUOUS IMPROVEMENT IN BUSINESS PROCESS
customer service and make efficient use of re-
sources.
Lastly, to make flexibility possible in the
process and/or service, rules must be aligned with
the business, in a stable technologic structure.
“The effort for realizing process-oriented informa-
tion systems can be significantly reduced when
using workflow technology (instead of conven-
tional programming techniques)” (Weber et al.
2009).
3.3. Technology
BPM is usually identified as a mix of business
administration and computer science.
Business managers know the main roles of
business, process and management strategy in the
firm. All have been established, studied and im-
proved over a long period of time. Technology,
however, has been developed more rapidly and
recently, significant increments have changed
these coordinates. Moreover, “while business ad-
ministration professionals tend to consider infor-
mation technology as a subordinate aspect for ex-
perts to handle, by contrast computer scientists
often consider business goals and organizational
regulations as terms that do not deserve much
thought but require the appropriate level of ab-
straction” (Weske 2007).
The development of technology allows intro-
ducing any information and control system, data
source or other technology into business processes.
More specifically, business activity monitoring
tracks process performance as its happening, man-
ages many indicators, displays key process metrics
and trends and predicts future behaviours.
When the firm decides to outsource technol-
ogy support (Weber et al. 2009), it has to rely on
promises of the service provider. To choose tech-
nology, firms must ask for custom demonstrations,
make sure the vendor shows what it can do and
assure a cost-benefit analysis. What is still absent
and what is required by information systems are
quantitative estimation based on empirical re-
search. So, why not, does the firm empower hu-
man resources and instruct an executive manager
who has both Information Technology (IT) and
business knowledge (Neubauer 2009)?
If the firm decides to internalize software so-
lutions related with BPM, it must be conscious to
the fact that this support can not be standard if the
process is not. Business and technology should be
aligned.
The goal is: nothing valuable needs to be dis-
carded and everything is reusable. The stage of
tests execution is critical to assure attempt correc-
69
tions. The orientation should be assigned to pro-
cess optimization, introducing improvements that
could assure benefits to the firm to its process in-
stead of the representation of what exists in infor-
mation system to implement. The new process
may require new guidance, new technology and
new data accessibility (Siha, Saad 2008). The
business adjustments, job environments and the
availability of all infrastructures should be consid-
ered.
As a first step, the firm needs to provide flexi-
bility by adopting process mapping and design.
This procedure defines, quickly and rigorously,
processes in value chains and orchestrates the roles
and behaviours of all necessary people and sys-
tems.
3.4. Mapping
The first step to adopt BPM is the
commitment of the firm to have all processes
mapped, to recognize their connections among
different areas and to get familiar about all
expenditure and investment needed.
In an initial period, by scheduling work
sessions, the firm should define what it is capable
to do. Indeed, the various stages during the design
and implementation of process choreographies
should be discussed.
Generally, the firm must assure that there is
the required architecture that replies to its mission.
First, the flowchart shall include the business
rules which guarantee more elasticity to the
process and must be easily fulfilled. Second, it is
crucial to understand the utility of each process
near its final users. So, processes shall be
personalized and simply managed. Only achieving
this, the control charts can “analyze identify and
prevent employee time waste in addition to
tracking and forecasting design performance for
efficient resource allocation” (Hamza 2009).
Therefore, this sort of charts can be used to
audit design process in real time, providing re-
commendations to people or systems in order to
develop the process. The benefit is that the “in-
formation about the business process can be
propagated from any information source–real–
time, and more–to line managers or executives”
(Hamza 2009).
Waste can be prevented if the firm changes its
own organization. The firm has different depart-
ments; for each one, there should be settle goals,
activities and measures to control. But on the other
side, and looking forward to establish BPM, the
firm must adopt a transversal view trough all the
organization. The firm should define the provided
 R. Gonçalves
products and/or services: description, procedures
to follow, people and/or departments involved,
service level, control indicators and others.
In this business–oriented view, the following
figure consists in a simple example.
Fig. 1. Example of a Mapped Process
Suppose a service level agreement (SLA) firm
and the definition of one of the provided services:
invoice processing and payment. It defines the in-
volvement of each department–facility, accounts
payable and treasury; the map shows the flow since
the invoice arrives firm till the payment day. Instead
of attending only to each area, individually, the is-
sue is to define the objectives by process and not by
department.
Concerning mapping processes it is also essen-
tial to define the related drivers of adopting BPM.
3.5. Drivers
One driver is the opinion/reply of each department
that is part of the strategy of the firm. The task
becomes hard because each department has influ-
ence in the strategy of the firm.
Another drive is the maturity of the organiza-
tion (if the processes are already mapped, for in-
stance), the approach and other integrations.
In general, BPM drivers are not technological
but economic (Smith, Finger 2003). Information
concerning products and prices are instantaneously
and globally available. Commercial barriers be-
70
tween nations and regions are being dismantled.
Market segments are disappearing.
In this world in change, firms recognize part-
nerships, joint ventures, collaboration and out-
sourcing, as the new directions to assure competi-
tive vitality.
3.6. BPM Engaged or Divorced with BPO?
Firms must be focus on core business functions to
create competitive differentiation in the market-
place: outsourcing is a possible solution. This
strategy assures cost reduction and improves ser-
vice levels.
There are two main reasons to adopt BPO:
– The firm can not develop the process well
enough to compete;
– The process must be recruited from market
or be eliminated to liberate resources.
BPM adds to BPO the ability given to part-
ners to assure business processes control, even if
the partners are developing partial or totally with
third parties (Smith, Finger 2003). With this exper-
tise, the firm can acquire new virtual processes,
represented as assets, such as: people, skills, ma-
chines, human capital and intellectual property.
This approach provides a difference from the re-
engineering from processes in–house. Instead of
drawing the process, the value added is given by
processes combination.
Although, firms should avoid understanding
this methodology as a simple intellectual challenge
and fun (Jeston, Nelis 2008), otherwise it will fail
during the implementation.
4. BPM as a Solution to Actual
Management Context
Faced with the age of information, managers have
a challenge in hands. On one side, they must reply
to regulatory and governance requirements, which
implies additional costs, such as, “changes in busi-
ness regulations, audit requirements or improve-
ments in (our) understanding of how to mobilize
and catalyze resources” (Smith 2003). On other
side, they have to follow the fast growth of infor-
mation technology.
Business is under a great pressure to reengi-
neer change management. BPM should not be op-
tional (Smith, Finger 2003). Firms that understand
that they must leave the current state of “as–is” to
“to–be” are becoming process-managed enter-
prises. Each organization needs to find out what is
going on in the business and how potential modifi-
cations can impact in the business.
 BUSINESS PROCESS MANAGEMENT AS CONTINUOUS IMPROVEMENT IN BUSINESS PROCESS
Another transformation in market is the behav-
iour of the customer. Nowadays, customers have
more freedom, more sense of desire and needs.
This “new” economic agent stands in the begin-
ning and in the end of value chain. So, clients also
define processes.
By implementing BPM, the firm gets better
prepared to reply to actual management scenario,
being more sensitive to several goals, such as:
– Supplier orientation–to improve business
processes by the information that is ex-
changed in both directions;
– People management–to assure better man-
agement visibility of the business, improv-
ing decision making (Cumberlidge 2007);
– Process view–to measure and control all op-
erational processes;
– Organizational structure–to become skilled
in new services, manufacturing processes
and new business models;
– Values and beliefs–to reply to Globalization
by finding advantages in cost, quality and
innovation; to reply to Commoditization by
competing with products and services which
are nearly indistinguishable to the customer.
That obliges to differentiate in a single fac-
tor, such as price.
Fig. 2. Vlerick BPM Holistic View (Contribute of Vlerick
Leuven Gent Management School (Belgium) in BPM Annual
Conference (Lisbon 2009))
− Process performance. To reduce the overall
cost of governance requirements compliance
by automating processes and reporting; to in-
crease productivity by generating more value,
with fewer resources and in less time;
− Information technology. To support end–to–
end processes and guarantee real time moni-
toring to sustain decision making;
71
− Client orientation. To assure better outputs,
such as consistent quality, more customer sat-
isfaction.
Fig. 2 clarifies this description.
Overall, with BPM, the firm is what the firm
runs. Internal organizational BPM capability
should be developed and must be part of business
and management (Jeston, Nelis 2008). The model
of implementation is not just the plan: it is the en-
gine that runs the process.
5. BPM as Continuous Improvement Support
In short, with this methodology, the firm must be
able to:
– Assure a process design work (Sharp,
MCDermott 2008);
– Develop process identification, modelling,
analysis and redesign;
– Define when one process ends and another
starts;
– Manage detail in a visual model;
– Engender out–of–the–box ideas for the “to–
be” process.
To implement BPM, the firm should adopt a
multidisciplinary and functional structure that at-
tends to process, project manager, processes man-
agers and managers in general.
Furthermore, “underlying the mechanistic
view of process is also a number of assumptions,
such as perfect knowledge of the human actors
involved, that humans work in a rational and logi-
cal way and that problems have a solution” (Lind-
say et al. 2003).
The adoption of BPM is divided in stages,
giving special attention to quick-wins that support
new diligences. BPM provides a “what-if” analy-
sis, which means that organizations can simulate
the performance of processes before implementing
them. In other words, the firm must ask “what-if”
about how the processes could work best.
The important thing to learn is that the ap-
proach is global, not only technological but man-
aged by a staff with experience in defining proc-
esses, involving organization and adopting new
technologies. Usually the cost-benefit analysis is
not a problem because firms know that it is a ma-
jor gain in the optimization of the process.
Four common steps of BPM implementation
can be eminent (Bucher, Winter 2009):
– Process recognition, design and modelling
To study and analyse all tasks and activities of
the firm;
– Process implementation and execution
To setup and/or correct all activities, tasks, re-
sources, supporting information technology
 R. Gonçalves
and to provide training and ongoing support
of processes;
– Process monitoring and controlling
To operate in real–time in order to be able to
take corrective action in case of process ex-
ceptions and failures; the introduction of
process performance indicators can also be
useful to support managerial decisions;
– Process enhancements
The continuous improvement of business
process and of the process landscape must
not be forgotten.
Next, a description will be presented of some
key factors – top management, people, process –
and several alerts to be succeeded.
5.1. Top Management
First, organization should think the process, in-
volving process owners who plan, meet regularly,
work collaboratively and also involving the main
stakeholder. In the case of this last player, organi-
zation must also handle the expectation created
concerning BPM. The firm should start thinking in
basic processes–low profile–with easy implemen-
tation, to assure a large impact, with a low risk.
In fact, this project should be assumed by
higher levels in the hierarchy of the firm, who
should take responsibility for mapping, imple-
menting, follow-up and innovation.
Effective management is crucial to guarantee
the alignment of business change initiatives, start-
ing with processes to set up alliance in the begin-
ning of the project and continuing with strong
management process, system and structure right
through the life of the project (Box, Platts 2005).
Similar opinion is also supported (Siha, Saad
2008): top management should be effective, real
and active. Moreover, strategic alignment should
be tied to the corporate strategy and to the core
competency, both are critical to the success of the
organization.
Then, the firm must select the right staff to
apply to this work and must clarify to all, the mis-
sion and the culture assumed.
5.2. People
Definitely, if the top management actively stimu-
lates business process orientation, employees feel
motivated to describe the noises and the improve-
ments to the processes owners. The team work will
be promoted. The respect for company spirit is
crucial to manage the process and it is also impor-
tant to assure information transfer between de-
partments and work groups.
72
The business process staff should facilitate
and assure all processes diligences and work to-
gether with IT department. Occasionally business
process staff can assume management functions.
Although accumulating functions, these employees
are more capable to easily understand the overall
and “change hats”.
Employees who work in operations assure the
right understanding of business and all processes.
Managers must invest in training and should de-
fine a process team including all necessary roles
such as process owner, process controller and
process auditor (Neubauer 2009).
Also human resources department should be
involved in process orientation policies, such as:
skills, like coaching, ability to create and manage a
team. As had been suggested (Siha, Saad 2008) the
effect of the new process on employees should not
be mistreated. They need to know how it is going
to influence their future jobs. Moreover, assure the
use of the right people in the right project.
Finally, from time to time, external agents
(for example, consultants) are also needed to im-
plement BPM. This decision is related with the
maturity of the firm (Jeston, Nelis 2008). Indeed,
every organization can also benefit from an exter-
nal highly qualified process coach and mentor.
The staff may describe all processes with the detail
required, but if there are no skill levels to manage
a project, the external help can be crucial.
5.3. Process
The main goal is to assess to current business
processes and see where process improvement and
systems development can take place (Sharp,
MCDermott 2008).
Second, instead of applying the method to all
processes, the firm can choose only the processes
of sub-processes that need to be defined and to be
an object of control. “Start small with one project”
(Jeston, Nelis 2008). It means that the focus is not
necessary all value chain, but only a part of it. This
also serves as a pilot to a first experience with
BPM.
This is a way of capturing knowledge–
everything that firms can lose when people leave
or forget processes. Instead of believing in indi-
vidual knowledge to assure task execution, organi-
zation must believe on documented processes to
execute tasks.
Indeed, process improvement project is a pro-
cedure to fall. More activities should be carefully
chosen and broadly defined (Siha, Saad 2008) so
that the resulting progress is more likely to extend
all over the entire business.
 BUSINESS PROCESS MANAGEMENT AS CONTINUOUS IMPROVEMENT IN BUSINESS PROCESS
Another feature is that the firm should meas-
ure the level of the automatization, to look to all
organization and find the percentage of automatic
processes and the percentage of non–automatic
processes. So, with BPM, the firm can automate
several process tasks that may have been previ-
ously manually executed. Firms can join new and
existing means to provide this, building on, not
replace, existing standards.
Further, sustainability needs to be assured
(Siha, Saad 2008). It is important to ensure the
continuous improvement of the process and not
fulfil with just the initial result of improvement. It
is recommended to define a structure in place to
avoid reversion, “a system of formal problem solv-
ing process in place, a consistent focus on im-
provement activities and long-term measurable
objectives which are linked to the improvement
efforts”.
5.4. To be Succeeded
To ensure success on adopting BPM, firms must
follow a group of main principles and alerts.
For such implementation, the critical success
factors had been resumed in four categories (Al-
Mudimigh 2007): commitment from top manage-
ment, changing of the existing processes, the IT
infrastructure, and deploying change management.
Top
Management
Commitment
Change
Management
IT Business
Infra- Process
Structures Change
Fig. 3. Critical Success Factors Categories (Al-
Mudimigh 2007)
Also, for the success of the project it is advisable:
– To define goals for macro processes and not
for departments;
– To align the project to business, which
means, too support “systematical integration of
BPM into long-term business objectives”
(Neubauer 2009);
– To create a detailed plan to facilitate the im-
plementation;
– To invest in training; assure that the busi-
ness is the first step;
– To create value in processes consistency;
73
– To associate processes and destroy silos
(which means, that instead of analysing by de-
partment, the firm should analyse processes trans-
versally);
– To define process indicators and metrics
(Siha, Saad 2008) is important to be established
and used before and after assessing productivity.
The selection of the performance measures is criti-
cal. In general, they should be objective, compre-
hensive and reflecting important criteria in the
process, which should follow-up the business).
– Finally, to “practice what you preach!”
(Jeston, Nelis 2008).
6. Conclusions
All modern firms need a process point of view
(Baldam 2007). When process is discussed there is
generally an association to instruments, method-
ologies and training. But that is not enough.
Actual economic development obliges process
professional to start up and manage operational
increments and competitive advantages. Indeed
pressure in business world is increasing and be-
yond that the nature of people and work has
changed. The firm should encourage and give
power to staff to deliver more with less empower-
ment.
Considering the management context already
described and after learning BPM philosophy, the
firm can not miss the train. It is time to process
makes the difference. BPM puts all efforts at
achieving process-based organizational efficiency.
Furthermore, BPM makes it possible to ob-
serve real–time performance of processes and eas-
ily adapt to changing events. This platform creates
value added for different players, customers and
stakeholders. Management sets people and sys-
tems in pursuit for achieving business goals. In
this point of view, it is crucial, to attend to
enactment, knowing how people operate in the
organization.
BPM is the potential mechanism to help firms
define business processes, unify information tech-
nology and promote collaboration and innovation.
It is also a success factor to help firms manage
change; only the firms that develop can survive.
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